Native staking as collateral challenges liquid staking on Solana and raises fresh questions about leverage, liquidity, and risk.
Jupiter has launched native staking as collateral on Jupiter Lend, a move that could reshape liquid staking on Solana and unlock access to nearly $30 billion worth of staked SOL for decentralized finance. The update allows users to borrow against natively staked SOL without first converting it into a liquid staking token.
That sounds technical. It is not. It means people who already stake SOL with a validator can now use that same stake as loan collateral while continuing to earn staking rewards. This development touches three fault lines in the Solana ecosystem: liquid staking on Solana, leverage risk, and how much of that $30 billion is actually usable.
What is Jupiter native staking as collateral?
Jupiter Lend now lets users deposit natively staked SOL into validator-specific vaults. The system creates an internal receipt called an nsTOKEN, such as nsJUPITER or nsHELIUS. That receipt represents the staked position and can be used as collateral to borrow SOL.
Previously, users who wanted to use staked SOL in DeFi had to rely on liquid staking on Solana. They would stake through a protocol, receive a liquid staking token, and then use that token in lending markets. Jupiter removes that extra step. Can staked SOL be used in DeFi without giving up native staking? The answer is now yes, but with conditions.
How does nsTOKEN work?
The nsTOKEN stays inside Jupiter Lend and reflects the value of the underlying stake account. It grows over time as staking rewards accrue. It is not freely tradable like traditional liquid staking tokens.
Liquid staking on Solana relies on tokens that trade on the open market. nsTOKEN is priced directly from the stake account, not from market supply and demand. That reduces price-mismatch risk but keeps the system tightly controlled.
What is the LTV ratio?
Media coverage reports that users can borrow up to about 87% loan to value. Liquidation may occur around 88%. Jupiter tracks risk through a debt-to-collateral ratio model.
For readers asking, “What is SOL liquidation risk?” the answer is direct. If the SOL price falls and your borrowed amount becomes too large relative to your collateral, your position can be liquidated. This is where the Solana leverage risk enters the story.
Does this replace liquid staking on Solana?
This is where the story gets interesting. Liquid staking on Solana has been the default onramp to DeFi for years. You stake, you get an LST, and you use that LST in lending markets. It worked. But it added layers: smart contract risk, de-pegging risk, and fees.
Jupiter’s new model cuts out the middleman. Your native stake account becomes the collateral directly. No LST required. That doesn’t mean liquid staking on Solana disappears. Not even close. LSTs still offer instant liquidity and portability across protocols. But for long-term holders who staked with validators they trust and never wanted to mess with derivatives, this is massive. They can finally borrow without disrupting their strategy.
If you’re searching for “liquid staking on Solana” to understand your options, the short answer is you now have two paths. The LST path for flexibility, or the native path for simplicity and direct validator exposure.
The leverage question
Here’s the angle that’s not getting airtime. This feature quietly introduces leverage to millions of SOL holders who never touched DeFi before.
Think about it. Before, if you staked SOL, you were a passive earner. No debt. No liquidation risk. Now, with a few clicks, you can borrow against that stake. Maybe you use the borrowed SOL to buy more SOL, stake that, and borrow again. That’s recursive leverage. It’s powerful. It’s also dangerous.
Jupiter set the liquidation threshold at 88%, meaning if your borrowed amount hits 88% of your collateral’s value, you get liquidated. In a volatile market, that buffer can vanish fast. The protocol’s documentation emphasizes that liquidations only happen if your position crosses that line. But with staking rewards flowing in, some users might push close to the edge, assuming yield will save them. That’s a bet. And bets can go wrong.
If the SOL price drops sharply, leveraged stakers could face cascading liquidations. That’s not a Jupiter problem specifically. It’s a leverage problem. And leverage just got easier.
What comes next?
The validator list will grow. Jupiter says more vaults are coming. And eventually, you’ll probably be able to borrow more than just SOL .
But for now, the story is simple: a giant pool of staked SOL just became borrowable. That’s bullish for liquidity, bullish for capital efficiency, and quietly, just a little bit scary.
If you’re sitting on staked SOL and wondering what to do, the feature is there. Just know what you’re signing up for. Borrowing against your stake isn’t free money. It’s a risk dressed up as yield.
